Errors and Omissions Insurance Des Moines
What type of companies should consider purchasing Errors and Omissions Insurance? Almost every professional can benefit from errors and omissions insurance, which is also called professional liability, professional indemnity or “E&O” insurance. This coverage will protect you from loss or damage arising from poor or misleading advice, or an act of negligence that leads to a client’s financial loss. Commercial General liability policies provide coverage for damages from bodily injury or property damage but leave coverage gaps when it comes to financial losses.
There are many different types of errors and omissions policies and the wording is not standard from carrier to carrier. Also, this coverage is written on what is called a “claims-made basis,” which is very different from other kinds of liability coverage.
Facts About Errors and Omissions Claims
- 1 out of 7 professionals will be involved in an errors and omissions lawsuit
- The average cost of a settled claim exceeds $18,000
- 80% of all claims involve allegations of misrepresentation or negligence
Types of Policies Available
The list below provides an overview of the various professions for which errors and omissions coverage is available. Keep in mind that this is not a complete list, and your agent will be able to provide some guidance when you decide to purchase commercial insurance coverage:
- Professionals of all kinds in the healthcare industry
- Architects and engineers
- Insurance agents
- Financial planners
- Benefit plan administrators
- Barbers and beauticians
Examples of Losses Resulting in E&O Claims
There are many potential causes of loss that can involve errors and omissions insurance. For example:
- A physician fails to make a critical diagnosis of illness due to lack of knowledge or a misinterpretation of symptoms.
- A realtor fails to give a client all the information on a property and later the client finds the property is not zoned for the intended purpose.
- A home inspector fails to make note of a mold infestation and a buyer ends up with an expensive problem to fix.
- An attorney misses a filing date and a case is lost.
- An accountant makes a mistake on a tax return, resulting in a financial penalty.
- A beautician uses the wrong product and leaves a customer with severely damaged hair.
- A stockbroker fails to execute an order in a timely manner and a substantial loss results.
- A company website makes a particular statement or promise that is misleading or in some way causes a visitor to make a poor choice.
What Is a Claims-Made Policy?
Errors and omissions insurance policies are written on what is known as a “claims made” form. A standard general liability, by contrast, is known as an “occurrence” policy. A claims-made policy will respond only to claims made while the policy is in force.
The reason for this difference in format is because the events leading up to an error or omission claim can be spread over a long period of time. It is not always possible to point to a given moment and say that is when the error or omission occurred.
Claims made policies have two unique features.
- An insurer writing a new claim made policy does not want to be responsible for claims arising from events prior to when the policy was established. Therefore the carrier will establish the effective date of its policy as the “retroactive date.” Any claims arising from events prior to the retroactive date will not be covered, even if made while the policy is in force. Subsequent policy renewals without any lapse in coverage will retain the original retroactive date.
- The second unique feature is called the “discovery period.” If coverage is terminated for any reason, future claims will not be covered even if they arise from events occurring while the policy was in force. Some companies provide a limited discovery period built into the policy, such as three or six months. If you are buying an E&O policy and you want a longer discovery period, you may be able to purchase one for an additional premium. Otherwise, you or your agent will have to go to a specialty market to obtain the coverage.
Note: Claims-made forms are very complicated. Be sure to work with a knowledgeable agent who can provide the assistance you need.
Errors and Omissions Insurance Policies Vary
There are no standard policies for errors and omissions coverage. Each carrier writes its own forms. While many features are similar, policies can have substantial differences in coverage. Also, rates are not regulated in this area of insurance as they are in more common forms of coverage and can vary substantially from company to company.
It is important to tailor your errors and omissions insurance to the specific risks you face in your line of work and it is frequently the case that the cheapest policy is not the best policy.
Important Notes on Errors and Omissions Insurance
When you are reviewing your professional liability risks and shopping for an errors and omissions policy, keep the following issues in mind:
- Errors and omissions policies are not standard.
- The options regarding retroactive dates and discovery periods can be critical to the long-term viability of coverage.
- Professionals whose claim exposure can continue for many years after retirement should be especially sensitive to the availability of long discovery periods.
- It is also important to know that policy conditions and premiums can vary dramatically, so it is important to obtain multiple quotes on your E&O coverage, and fully examine the coverage provided.
How Much Coverage Do I Need?
Errors and Omissions Insurance (also known as Professional Liability Insurance) costs range from a median of $860 to $1,939 and an average of $956 to $2,652 per year. E&O Insurance prices vary depending on the size and type of business you do.
Why Do Real Estate Agents Need Errors and Omissions Insurance?
Errors and omissions insurance, E&O for short, is the name used to describe a type of malpractice insurance coverage for real estate professionals. The coverage protects real estate professionals against financial losses from lawsuits filed as a result of their work in the real estate profession.
What is Notary Errors and Omissions Insurance?
A Notary Errors and Omissions (E&O) policy protects you, as a Notary, should you make an unintentional mistake or omission while notarizing. Or if someone files a false claim against you. Financial damages from a notarization mistake or omission can be filed against your NNA Notary bond.
Our goal at Densmore Insurance Strategies, Inc. is to provide insurance solutions that keep small to medium-sized businesses protected. That is why we combine various coverage options into one convenient package – for more benefits than a typical Business policy and better savings through competitive pricing.
We provide small and mid-sized companies that need Errors and Omission Insurance to protect their business. Our insurance agency provides specialized insurance protection to businesses near Ankeny Iowa, Altoona Iowa, Bondurant Iowa, Des Moines Iowa, West Des Moines Iowa, Johnston Iowa, Waukee Iowa, Grimes Iowa, Polk City Iowa, Pleasant Hill Iowa, Norwalk Iowa, Huxley Iowa, and Urbandale Iowa. We are licensed to serve Iowa, Illinois, Nebraska, Florida, Missouri, Arizona, Texas, and Tennessee.